Credit guru: Most don't know what they owe

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(CNN) -- The holidays might be over, but holiday bills often last well into the new year. Howard Dvorkin, the founder of Consolidated Credit Counseling Services, joined CNN's Gerri Willis to help strategize how consumers can get out of debt.

DVORKIN: Absolutely. You've got to stop using the credit cards in order to get out of debt. If you start paying down on some and keep charging up on others, you're not going to get anywhere. So it's very important. Start paying with cash. If you can't afford it, don't buy it.

WILLIS: Pay down the balances, you say. But also, figure out what you owe. How it is possible that people don't know how much credit card debt they have?

DVORKIN: Most people that call our offices at Consolidated Credit Counseling Services are significantly understated in the amount that they owe.

WILLIS: What do you mean? That they don't know or they don't understand?

DVORKIN: They don't know. They don't know. You have to understand that most people carry balances anywhere between four and eight credit cards. And as such, it's very difficult for us to add up four to eight credit cards and the balances.

WILLIS: Yes.

DVORKIN: So it's unfortunate that most people don't know. The starting point is, sit down at your kitchen table. Spread out your bills. Add them up. Go on and put it on a piece of paper. Figure out who you owe, what you owe them, and how much interest you're paying. And that's how you get out of debt.

WILLIS: So how do I avoid getting back in the red once I really establish myself paying off this debt?

DVORKIN: Well, most people that go through our program at Consolidated Credit Counseling, because they educate themselves while in our debt management program, are able to go through and not get into the same problem. The reality is they have to go through and .. stop using the credit cards and live off cash. ... We're in a society that credit cards are a necessity to some point.

WILLIS: That's right.

DVORKIN: But, when the bill comes in, you've got to make sure that you're going to pay it off.

WILLIS: I want you to give us a couple of signal, signs, really, that your credit cards are a problem that really needs attending.

DVORKIN: Well, there are some very clear signals when people have trouble.

One is, if they can only make the minimum payment, then they need to go through and re-evaluate themselves. If they're taking one credit card -- taking cash advances from one credit card to make the minimum payment on another credit card, that's not high finance. That's going to -- that's going to put you in the -- in the -- in the hole.

WILLIS: Right. Hey, Howard, how about this idea? Is there a certain proportion of your income beyond which you shouldn't be paying on credit cards? How much, in fact, is too much of your usual budget, monthly budget, to pay on credit cards?

DVORKIN: Ten to 15 percent of your take-home pay, after taxes, should go towards credit cards. Anything more than that, there is a problem. And you've got to understand that people put off doctor's appointments and dentist appointments ... just because they don't have the cash to pay for it. And you've got to be concerned with those also.

WILLIS: Howard, great points. Great advice. Thank you so much for joining us today.